| Delaware                                                                | 87-0398271                                    |
|-------------------------------------------------------------------------|-----------------------------------------------|
| (State      or Other Jurisdictionof      Incorporation or Organization) | (I.R.S.      EmployerIdentification      No.) |

| Large      accelerated filer |  ̈ | Accelerated      filer         |  ̈ |
|------------------------------|--------|--------------------------------|--------|
| Non-accelerated      filer   |  ̈ | Smaller      reporting company | x      |

----

|             |                                                                                                                         | Page   |
|------------------|------------------------------------------------------------------------------------------------------------------------------|--------|
|             | PART      I                                                                                                                  |   |
|             |                                                                                                                         |   |
| Item      1.     | Description      of Business                                                                                                 | 3      |
|             |                                                                                                                         |   |
| Item      1A.    | Risk      Factors                                                                                                            | 8      |
|             |                                                                                                                         |   |
| Item      1B.    | Unresolved      Staff Comments                                                                                               | 13     |
|             |                                                                                                                         |   |
| Item      2.     | Properties                                                                                                                   | 13     |
|             |                                                                                                                         |   |
| Item      3.     | Legal      Proceedings                                                                                                       | 14     |
|             |                                                                                                                         |   |
| Item      4.     | Reserved                                                                                                                     | 14     |
|             |                                                                                                                         |   |
|             | PART      II                                                                                                                 |   |
|             |                                                                                                                         |   |
| Item      5.     | Market      for Registrant’s Common Equity, Related Stockholder Matters and Issuer      Purchases of Equity Securities | 14     |
|             |                                                                                                                         |   |
| Item      6.     | Selected      Financial Data                                                                                                 | 17     |
|             |                                                                                                                         |   |
| Item      7.     | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations                        | 17     |
|             |                                                                                                                         |   |
| Item      7A.    | Quantitative      and Qualitative Disclosures About Market Risk                                                              | 26     |
|             |                                                                                                                         |   |
| Item      8.     | Financial      Statements and Supplementary Data                                                                             | 26     |
|             |                                                                                                                         |   |
| Item      9.     | Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosure                               | 26     |
|             |                                                                                                                         |   |
| Item      9A(T). | Controls      and Procedures                                                                                                 | 26     |
|             |                                                                                                                         |   |
| Item      9B.    | Other      Information                                                                                                       | 27     |
|             |                                                                                                                         |   |
|             | PART      III                                                                                                                |   |
|             |                                                                                                                         |   |
| Item      10.    | Directors,      Executive Officers and Corporate Governance                                                                  | 27     |
|             |                                                                                                                         |   |
| Item      11.    | Executive      Compensation                                                                                                  | 29     |
|             |                                                                                                                         |   |
| Item      12.    | Security      Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters                     | 31     |
|             |                                                                                                                         |   |
| Item      13.    | Certain      Relationships and Related Transactions, and Director      Independence                                          | 32     |
|             |                                                                                                                         |   |
| Item      14.    | Principal      Accountant Fees and Services                                                                                  | 34     |
|             |                                                                                                                         |   |
|             | PART      IV                                                                                                                 |   |
|             |                                                                                                                         |   |
| Item      15.    | Exhibits      and Financial Statement Schedules                                                                              | 34     |
|             |                                                                                                                         |   |
|             | Signatures                                                                                                                   | 38     |

----

----

----

|   | · | Advertising      Agencies with China operations, including Dentsu, Ogilvy, and      Universal McCann; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | Media      Planners, such as      MindShare China and Zenith; |
|--------|--------|---------------------------------------------------------------|

|   | · | Large      Brands, such as      Nike, Proctor & Gamble, LG, Samsung, Lenovo, Starbucks, and      Levi’s; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

----

|   | · | Premium      Advertisers and Content Owners, including advertising agencies      like WPP, Omnicom and Interpublic; content owners with their own      advertising, such as NBC, CBS, ABC and The New York Times; and infomercial      creators, like QVC and WilliamsGroup; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Independent producers, artists, designers      and filmmakers who own untapped content;  and |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | Advertising      Networks, including      Advertising.com, ValueClick, ClickBooth, CJ.com and      Zedo. |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | Almost all of these sites are comparable to YouTube: content is mostly user generated (UGC) |
|--------|--------|---------------------------------------------------------------------------------------------|

|  |  |
|--|--|

|   | · | This group is similar to US      portals such as Yahoo! and include but do not focus on      video |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | These portals are highly popular      as search engines and carry feeds from major news and entertainment      sources |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | These sites have large      advertising sales staffs with established relationships to ad      agencies |
|--------|--------|---------------------------------------------------------------------------------------------------------|

----

|   | · | The China Youth      League |
|--------|--------|-----------------------------|

|   | · | The Ministry of Public      Security |
|--------|--------|--------------------------------------|

|   | · | The PRC State Administration of      Radio, Film and Television |
|--------|--------|-----------------------------------------------------------------|

|   | · | The Movie and Television Network      Center of China Youth League |
|--------|--------|--------------------------------------------------------------------|

|   | · | The Telecommunication      Administrative Bureau of Beijing,China |
|--------|--------|-------------------------------------------------------------------|

----

----

|   | · | Power loss, transmission cable      cuts and other telecommunication  failures; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Damage or interruption caused by      fire, earthquake, and other natural  disasters; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | Computer viruses or software      defects; |
|--------|--------|--------------------------------------------|

|   | · | Physical or electronic break-ins,      sabotage, intentional acts of vandalism, terrorist attacks and other      events beyond our control. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Establishing and maintaining      broad market acceptance of our products and converting that acceptance      into direct and indirect sources of  revenue; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establishing and maintaining our      brand name; |
|--------|--------|---------------------------------------------------|

|   | · | Timely and successfully      developing new products; |
|--------|--------|-------------------------------------------------------|

|   | · | Developing and maintaining      strategic relationships to enhance the distribution of our      products. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

----

----

----

|   | · | That a broker or dealer approve a      person’s account for transactions in penny stocks;    and |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | The broker or dealer receive from      the investor a written agreement to the transaction, setting forth the      identity and quantity of the penny stock to be      purchased. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Obtain financial information and      investment experience objectives of the person;  and |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | Make a reasonable determination      that the transactions in penny stocks are suitable for that person and the      person has sufficient knowledge and experience in financial matters to be      capable of evaluating the risks of transactions in penny      stocks. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Sets forth the basis on which the      broker or dealer made the suitability determination;      and |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | That the broker or dealer      received a signed, written agreement from the investor prior to the      transaction. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

----

|                      |              | Common Stock Price |   |
|---------------------------|-------------------|------------------------------|--------|
|                      |              | High                         |   |   | Low |   |
| 2009                      |              |                         |   |   |   |   |   |   |
| First      Quarter Ended  | March      31     |                         | $      | 0.13 |   |   | $ | 0.12 |   |
| Second      Quarter Ended | June      30      |                         | $      | 0.19 |   |   | $ | 0.19 |   |
| Third      Quarter Ended  | September      30 |                         | $      | 0.07 |   |   | $ | 0.07 |   |
| Fourth      Quarter Ended | December      31  |                         | $      | 0.08 |   |   | $ | 0.08 |   |
|                      |              |                         |   |   |   |   |   |   |   |
| 2008                      |              |                         |   |   |   |   |   |   |
| First      Quarter Ended  | March      31     |                         | $      | 0.06 |   |   | $ | 0.06 |   |
| Second      Quarter Ended | June      30      |                         | $      | 0.10 |   |   | $ | 0.10 |   |
| Third      Quarter Ended  | September      30 |                         | $      | 0.09 |   |   | $ | 0.09 |   |
| Fourth      Quarter Ended | December      31  |                         | $      | 0.15 |   |   | $ | 0.15 |   |

----

----

----

----

----

----

----

----

----

----

| Operating Lease Payments |   | MinimumPayments |    |
|--------------------------|--------|-----------------|---------|
| 2010                     |   | $          | 239,566 |   |
| 2011                     |   |            | 82,757  |   |
| 2012                     |   |            | 63,508  |   |
| Total                    |   | $               | 385,831 |   |

----

----

----

| Name                   |   | Age |   | Position                               |
|------------------------|--------|-----|--------|----------------------------------------|
| Jay      Rifkin        |   | 54  |   | Chief      Executive Officer, Director |
| William      B. Horne  |   | 41  |   | Director                               |
| Alice      M. Campbell |   | 59  |   | Director                               |
| Alan      Morelli      |   | 48  |   | Director                               |
| David      M. Kaye     |   | 55  |   | Director                               |

----

----

| Name and Principal Position |   | Year   |   | Salary($)(2) |    |   | Bonus($) |   |   | StockAwards($) |   |   | Option Awards($) (3) |   |   | Non-EquityIncentive PlanCompensation($) |      |   | NonqualifiedDeferredCompensationEarnings ($) |   |   | All OtherCompensation($) |   |   | Total  |   |
|--------------------------------------------|--------|--------|--------|--------------|---------|--------|----------|--------|--------|----------------|--------|--------|--------------------------------|--------|--------|----------------------------------------------|-----------|--------|---------------------------------------------------|--------|--------|-------------------------------|--------|--------|--------|--------|
|                                       |   |   |   |         |    |   |     |   |   |           |   |   |                           |   |   |                                         |      |   |                                              |   |   |                          |   |   |   |   |
| Jay Rifkin, (1)                            |   | 2009   |   | $            | 165,000 |   |     | $      | 0      |           |   | $      | 0                              |   |   | $                                            | 2,771,683 |   |                                              | $      | 0      |                          |   | $      | 0      |   |   | $ | 0 |   |   | $ | 2,936,683 |   |
| President      and                         |   | 2008   |   | $            | 165,000 |   |     | $      | 0      |           |   | $      | 0                              |   |   | $                                            | 0         |   |                                              | $      | 0      |                          |   | $      | 0      |   |   | $ | 0 |   |   | $ | 165,000 |   |
| Chief      Executive Officer               |   |   |   |         |    |   |     |   |   |           |   |   |                           |   |   |                                         |      |   |                                              |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |

|  | (1) | Mr. Rifkin was appointed      President on September 30, 2005, and Chief Executive Officer and director      nominee on December 29,2005. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | Consists of salary for      2009.  Consists of accrued salary for 2008, none of which has      been paid as of December 31,2009. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | Represents the dollar amount      recognized for financial reporting purposes of stock options awarded in      2009 computed in accordance with SFAS  123(R). |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            |   | Options Awards                                              |
|-----------------|--------|------------------------------------------------------------------|
|            |   | No. of SecuritiesUnderlyingUnexercisedOptions (#) |   |   | No. of SecuritiesUnderlyingUnexercisedOptions (#) |   |   | OptionExercise |   | OptionExpiration |
| Name            |   | Exercisable                                                      |   |   | Unexercisable |   |   | Price ($) |   | Date |
|            |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |
| Jay      Rifkin |   |                                                             | 112,500 |   |   |   | 37,500 |   |   | $ | 0.20 |   | 11/8/2016 |
|            |   |                                                             | 3,750,000 |   |   |   | 0 |   |   | $ | 0.13 |   | 5/11/2019 |
|            |   |                                                             | 0 |   |   |   | 20,000,000 |   |   | $ | 0.13 |   | 5/11/2019 |

----

| Name                   |   | Fees Earned orPaid in Cash ($) |   |   | StockAwards($) |   |   | OptionAwards ($)(1) |   |   | All OtherCompensation ($) |   |   | Total ($) |   |
|------------------------|--------|---------------------------------------------------------|--------|--------|----------------|--------|--------|--------------------------|--------|--------|-------------------------------------|--------|--------|----------------|--------|
| Alan      Morelli      |   |                                                    | 0      |   |           |   | 0      |                     |   | $      | 265,498                             |   |   |           | 0      |   |   | $ | 265,498 |   |
| Alice      M. Campbell |   |                                                    | 0      |   |           |   | 0      |                     |   | $      | 268,416                             |   |   |           | 0      |   |   | $ | 268,416 |   |
| David      M. Kaye     |   |                                                    | 0      |   |           |   | 0      |                     |   | $      | 265,498                             |   |   |           | 0      |   |   | $ | 265,498 |   |
| William      B. Horne  |   |                                                    | 0      |   |           |   | 0      |                     |   | $      | 274,251                             |   |   |           | 0      |   |   | $ | 274,251 |   |

|  | (1)  | Represents      the dollar amount recognized for financial reporting purposes of stock      options awarded in 2009 computed in accordance with Financial Accounting      Standards 123R. |
|--|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM      12.  | Security Ownership of Certain      Beneficial Owners and Management and Related Stockholder      Matters |
|---------------------|----------------------------------------------------------------------------------------------------------|

| Name of Beneficial Owner (1)                          |   | Common StockBeneficially Owned (2) |       |   | Percentage ofCommon Stock (2) |   |
|---------------------------------------------------------------------------|--------|---------------------------------------------------|------------|--------|----------------------------------------------|--------|
| Jay      Rifkin                                                           |   |                                              | 96,830,063 | (3)    |                                         |   | 58.80 | % |
| William      B. Horne                                                     |   |                                              | 747,289    | (4)    |                                         |   | 1.73 | % |
| Alice      M. Campbell                                                    |   |                                              | 612,500    | (5)    |                                         |   | 1.65 | % |
| Alan      Morelli                                                         |   |                                              | 400,000    | (6)    |                                         |   | 1.57 | % |
| David      M. Kaye                                                        |   |                                              | 462,500    | (7)    |                                         |   | 1.57 | % |
| Dennis      Pelino                                                        |   |                                              | 34,977,778 | (8)    |                                         |   | 21.67 | % |
| TWK      Holdings, LLC                                                    |   |                                              | 12,000,000 | (9)    |                                         |   | 7.56 | % |
|                                                                      |   |                                              |       |   |                                         |   |   |   |
| All      named executive officers and directors as a group (5    persons) |   |                                              | 99,052,352 |   |                                         |   | 56.70 | % |

|  | (1) | Except      as otherwise indicated, the address of each beneficial owner is c/o China      Youth Media, Inc., 4143 Glencoe Avenue, Marina Del Rey, CA      90292. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | Applicable      percentage ownership is based on 158,631,461 shares of common stock      outstanding as of March 29, 2010 plus, for each stockholder, any      securities that stockholder has the right to acquire within 60 days of      March 29, 2010 pursuant to options, warrants, conversion privileges or      other rights. Beneficial ownership is determined in accordance with the      rules of the Securities and Exchange Commission and generally includes      voting or investment power with respect to securities. Shares of common      stock that a person has the right to acquire beneficial ownership of upon      the exercise or conversion of options, convertible stock, warrants or      other securities that are currently exercisable or convertible or that      will become exercisable or convertible within 60 days of March 29, 2010      are deemed to be beneficially owned by the person holding such securities      for the purpose of computing the percentage of ownership of such person,      but are not treated as outstanding for the purpose of computing the      percentage ownership of any otherperson. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | Includes: (a) 88,354,605 shares      held by Rebel Holdings, LLC ("Rebel Holdings") of which Mr. Rifkin is the      sole managing member; (b) 2,421,292 shares which are directly held by Mr.      Rifkin; (c) 1,666,666 shares issuable upon conversion of a $150,000      principal amount convertible note held by Mojo Music, Inc. of which Mr.      Rifkin is the sole managing member, with a conversion price of $0.09 per      share; (d) 525,000 shares issuable upon exercise of stock warrants with an      exercise price of $0.09 per share; (e) 3,750,000 shares issuable upon      exercise of stock options with an exercise price of $0.13 per share, which      stock options are fully vested as of May 11, 2009; (f) 20,000,000 shares      issuable upon exercise of stock options with an exercise price of $0.13,      which stock options vest annually over a period of four years from May 11,      2010; and (g) 150,000 shares issuable upon exercise of stock options with      an exercise price of $0.20 per share, which stock options vest annually      over a period of three years from November 8, 2007. For the purposes of the applicable percentage of beneficial ownership, included are only those shares beneficially owned, plus any securities that Mr. Rifkin has the right to acquire within 60 days of March 29, 2010 pursuant to options, warrants, conversion privileges or other rights and does not include 20,037,500 shares issuable upon exercise of stock options which are not exercisable within such 60 day period. Mr. Rifkin’s reported beneficial ownership does not include certain shares of common stock issued and issuable for which certain shareholders have granted Mr. Rifkin an irrevocable proxy to vote for certain directors. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | Includes (a) 284,789 shares owned      by Mr. Horne; (b) 350,000 shares issuable upon exercise of stock options      with an exercise price of $0.13 per share, which stock options are fully      vested as of May 11, 2009; (c) 150,000 shares issuable upon exercise of      stock options with an exercise price of $0.20 per share which stock      options vest annually over a period of four years from November 8, 2007;      and (d) 2,000,000 shares issuable upon exercise of stock options with an      exercise price of $0.13, which stock options vest annually over a period      of four years from May 11, 2010. For the purposes of the applicable percentage of beneficial ownership, included are only those shares beneficially owned, plus any securities that Mr. Horne has the right to acquire within 60 days of March 29, 2010 pursuant to options, warrants, conversion privileges or other rights and does not include 2,037,500 shares issuable upon exercise of stock options which are not exercisable within such 60 day period. Mr. Horne has granted Mr. Rifkin an      irrevocable proxy to vote the shares of common stock issuable upon      exercise of such stock options for certain    directors. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (5) | Represents (a) 200,00 shares owned by Ms. Campbell; (b) 300,000 shares issuable upon exercise of stock      options with an exercise price of $0.13 per share, which stock options are      fully vested as of May 11, 2009; (c) 150,000 shares issuable upon exercise      of stock options with an exercise price of $0.20 per share which stock      options vest annually over a period of four years from November 8, 2007;      and (d) 2,000,000 shares issuable upon exercise of stock options with an      exercise price of $0.13, which stock options vest annually over a period      of four years from May 11, 2010. For the purposes of the applicable percentage of beneficial ownership, included are only those shares beneficially owned, plus any securities that Ms. Campbell has the right to acquire within 60 days of March 29, 2010 pursuant to options, warrants, conversion privileges or other rights and does not include 2,037,500 shares issuable upon exercise of stock options which are not exercisable within such 60 day period. Ms. Campbell has granted Mr. Rifkin an irrevocable proxy to vote the shares of common stock issuable upon exercise of such stock options for certain directors. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (6) | Includes: (a) 275,000 shares issuable upon exercise of stock options with an exercise price of $0.13 per share, which stock options are fully vested as of May 11, 2009;  (b) 2,000,000 shares issuable upon exercise of stock options with an exercise price of $0.13, which stock options vest annually over a period of four years from May 11, 2010; and (c) options to purchase 250,000 shares of common stock with an exercise price of $0.14 per share, which stock options vest annually over a period of four years from August 29, 2007. For the purposes of the applicable percentage of beneficial ownership, included are only those shares beneficially owned, plus any securities that Mr. Morelli has the right to acquire within 60 days of March 29, 2010 pursuant to options, warrants, conversion privileges or other rights and does not include 2,125,000 shares issuable upon exercise of stock options which are not exercisable within such 60 day period. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (7) | Includes (a) 275,000 shares      issuable upon exercise of stock options with an exercise price of $0.13      per share, which stock options are fully vested as of May 11, 2009; (b)      options to purchase 250,000 shares issuable upon exercise of stock options      with an exercise price of $0.20 per share which stock options vest      annually over a period of four years from November 8, 2007; and (c)      2,000,000 shares issuable upon exercise of stock options with an exercise      price of $0.13, which stock options vest annually over a period of four      years from May 11, 2010. For the purposes of the applicable percentage of beneficial ownership, included are only those shares beneficially owned, plus any securities that Mr. Kaye has the right to acquire within 60 days of March 29, 2010 pursuant to options, warrants, conversion privileges or other rights and does not include 2,062,500 shares issuable upon exercise of stock options which are not exercisable within such 60 day period. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (8) | Includes (a) 9,000,000 shares      which are directly held by Mr. Pelino; (b) 7,000,000 shares which are held      by New China Media LLC of which Mr. Pelino is the sole managing member;      (c) 16,200,000 shares which are held by Year of the Golden Pig LLC (“YGP”)      of which Mr. Pelino is the sole managing member; (d) 2,777,777 shares      issuable upon conversion of a $250,000 principal amount of a convertible      note held by YGP; and (e) 875,000 shares issuable upon exercise of stock      warrants with an exercise price of $0.09 per share. The address for Dennis      Pelino is 400 Alton Road Suite 3107, Miami Beach, FL      33129. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (9) | Includes 12,000,000 shares which      are directly held by TWK Holdings, LLC. The address for TWK Holdings, LLC      is 3 Lorong Bukit Candan 3, Taman Impian Batu 4 1/2, Jalan IPOH, 51100 KL,      Malaysia. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                            |   | Number of securities tobe issued upon exerciseof outstanding options,warrants and rights |       |   | Weighted averageexercise price ofoutstanding options,warrants and rights |   |   | Number of securitiesremaining available forfuture issuance under equitycompensation plans(excluding securitiesreflected in column (a)) |   |
|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|--------|--------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Plan category                                                   |   | (a)                                                                                                                                        |       |   | (b)                                                                                                    |   |   | (c)                                                                                                                                                                                                |   |
| Equity      compensation plans approved by security holders     |   |                                                                                                                                       | 40,958,333 |   |                                                                                                   | $      | 0.13   |                                                                                                                                                                                               |   |   | 9,041,667 |   |
|                                                            |   |                                                                                                                                       |       |   |                                                                                                   |   |   |                                                                                                                                                                                               |   |   |   |   |
| Equity compensation plans not approved by security      holders |   |                                                                                                                                       | 550,000    |   |                                                                                                   | $      | 0.42   |                                                                                                                                                                                               |   |   | -0- |   |
| Total                                                           |   |                                                                                                                                       | 41,508,333 |   |                                                                                                   | $      | 0.14   |                                                                                                                                                                                               |   |   | 9,041,667 |   |

| ITEM      13. | Certain Relationships and      Related Transactions, and Director  Independence |
|---------------|---------------------------------------------------------------------------------|

----

----

| Item      14. | Principal Accountant Fees and      Services. |
|---------------|----------------------------------------------|

| Item      15. | Exhibits and Financial      Statement Schedules |
|---------------|-------------------------------------------------|

| (1) | Financial      Statements |
|-----|---------------------------|

| (2) | Financial      Statement Schedules |
|-----|------------------------------------|

----

| (3) | Exhibits |
|-----|----------|

| ExhibitNumber |   | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 2.1           |   | Stock      Purchase Agreement dated as of December 20, 2005 among Digicorp, Rebel      Crew Films, Inc., Rebel Holdings, LLC and Cesar Chatel (Incorporated by      reference to the Company’s Form 8-K filed with the Securities and Exchange      Commission on December 21, 2005)                                                                                                                                                                                                                                                                                                                                                                                               |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 2.2           |   | Letter      Agreement dated December 20, 2005 among Digicorp, Rebel Crew Films, Inc.,      Rebel Holdings, LLC and Cesar Chatel (Incorporated by reference to the      Company’s Form 8-K filed with the Securities and Exchange Commission on      December 21, 2005)                                                                                                                                                                                                                                                                                                                                                                                                             |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 2.3           |   | Purchaser      and Company Disclosure Schedules to Stock Purchase Agreement dated as of      December 20, 2005 among Digicorp, Rebel Crew Films, Inc., Rebel Holdings,      LLC and Cesar Chatel (Incorporated by reference to the Company’s Form 8-K      filed with the Securities and Exchange Commission on January 5,      2006)                                                                                                                                                                                                                                                                                                                                              |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.1           |   | Articles      of Incorporation (Utah) (Incorporated by reference to the Company’s      registration statement on Form 10-SB (File No. 000-33067) filed with the      Securities and Exchange Commission on August 9, 2001)                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.2           |   | Certificate      of Incorporation of Digicorp, Inc. (Delaware) (Incorporated by reference      to the Company’s quarterly report on Form 10-QSB for the quarter ended      September 30, 2006, filed with the Securities and Exchange Commission on      December 13, 2006)                                                                                                                                                                                                                                                                                                                                                                                                        |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.3           |   | State      of Utah Articles of Merger of Digicorp, a Utah corporation, into Digicorp,      Inc., a Delaware corporation (Incorporated by reference to the Company’s      quarterly report on Form 10-QSB for the quarter ended September 30, 2006,      filed with the Securities and Exchange Commission on December 13,      2006)                                                                                                                                                                                                                                                                                                                                               |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.4           |   | State      of Delaware Articles of Merger of Digicorp, a Utah corporation, into      Digicorp, Inc., a Delaware corporation (Incorporated by reference to the      Company’s quarterly report on Form 10-QSB for the quarter ended September      30, 2006, filed with the Securities and Exchange Commission on December      13, 2006)                                                                                                                                                                                                                                                                                                                                           |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.5           |   | Certificate      of Designation filed with the State of Delaware on May 23, 2008,      authorizing our Series A Convertible Preferred Stock consisting of 500,000      shares, each of $.001 par value (Incorporated by reference to the      Company's Form 8-K filed with the Securities and Exchange Commission on      June 4, 2008)                                                                                                                                                                                                                                                                                                                                                 |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.6           |   | Certificate      of Amendment to our Certificate of Incorporation filed with the Secretary      of State of Delaware effective as of October 16, 2008 authorizing the      increase of the number of our authorized shares of Common Stock, par value      $.001 per share, from 60,000,000 to 500,000,000 and the number of our      authorized shares of Preferred Stock, par value $.001 per share, from      1,000,000 to 2,000,000, and our name change from “Digicorp, Inc.” to      “China Youth Media, Inc.” (Incorporated by reference to the Company's Form      8-K filed with the Securities and Exchange Commission on October 16,      2008)  |
| 3.7           |   | Bylaws      (Incorporated by reference to the Company’s registration statement on Form      10-SB (File No. 000-33067) filed with the Securities and Exchange      Commission on August 9, 2001)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.8           |   | Amendment      No. 1 to Bylaws (Incorporated by reference to the Company’s Form 8-K filed      with the Securities and Exchange Commission on July 21,    2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
| 9.1    |   | Voting      Agreement dated December 29, 2005 by and among Jay Rifkin and the      stockholders of Digicorp listed on the signature pages thereto      (Incorporated by reference to the Company’s Form 8-K filed with the      Securities and Exchange Commission on January 5, 2006)                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1*  |   | China Youth Media, Inc.      Stock Option and Restricted Stock Plan as Amended*                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2*  |   | Employment Agreement dated as of November 2, 2009, and effective as of July 1, 2009 by and between China Youth Media, Inc. and Jay Rifkin                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3   |   | Standard      Industrial/Commercial Multi-Tenant Lease dated July 18, 2005 between The      Welk Group, Inc. and Rebel Crew Films, Inc. (Incorporated by reference to      the Company’s Form 8-K filed with the Securities and Exchange Commission      on January 5, 2006)                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4   |   | Content      License Agreement dated June 2, 2008 by and between Digicorp, Inc. and New      China Media, LLC, YGP, LLC and TWK Holdings, LLC (Incorporated by      reference to the Company's Form 8-K filed with the Securities and Exchange      Commission on June 4, 2008)                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5   |   | Supply      Agreement for Content dated May 31, 2008 by and between Youth Media (Hong      Kong) Limited, a subsidiary of the Company, Yes Television (Hong Kong)      Limited, and New China Media LLC (Incorporated by reference to the      Company's Form 8-K filed with the Securities and Exchange Commission on      June 4, 2008)                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6   |   | Cooperation Agreement dated July 3, 2009 among China Youth Interactive Cultural Media (Beijing) Co., Ltd., China Youth Net Advertising Co. Ltd. and Youth Media (Hong Kong) Limited (Incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2009, filed with the Securities and Exchange Commission on November 16, 2009) |

----

| 10.7   |   | Loan      Consolidation and Amendment to Security Agreement dated as of September      10, 2008 among Digicorp, Inc., Rebel Holdings, LLC and Jay Rifkin      (Incorporated by reference to the Company's Form 8-K filed with the      Securities and Exchange Commission on September 19,  2008) |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                              |
| 10.8   |   | Secured      Convertible Consolidated Promissory Note between Digicorp, Inc. and Rebel      Holdings, LLC, dated September 10, 2008 (Incorporated by reference to the      Company's Form 8-K filed with the Securities and Exchange Commission on      September 19, 2008).                      |
|   |   |                                                                                                                                                                                                                                                                                              |
| 14.1   |   | Code      of Ethics (Incorporated by reference to the Company’s annual report on      Form 10-KSB for the fiscal year ended June 30, 2005, filed with the      Securities and Exchange Commission on September 28,  2005)                                                                   |
|   |   |                                                                                                                                                                                                                                                                                              |
| 21.1*  |   | Subsidiaries      of the Registrant                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                              |
| 31.1*  |   | Certification      by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a)      of the Exchange Act                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                              |
| 31.2*  |   | Certification      by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a)      of the Exchange Act                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                              |
| 32.1*  |   | Certification      by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b)      of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the      United States Code                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                              |
| 32.2*  |   | Certification      by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b)      of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the      United States Code                                                                                                    |

----

|                      |            | CHINA      YOUTH MEDIA, INC. |
|---------------------------|-----------------|------------------------------|
|                      |            |                         |
| Date:      April 13, 2010 | By:   | /s/ Jay Rifkin               |   |
|                      |            | Jay      Rifkin              |
|                      |            | Chief      Executive Officer |

| Signature              |   | Title                                                                                                                                             |   | Date           |
|------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                   |   |                                                                                                                                              |   |           |
| /s/ Jay Rifkin         |   |                                                                                                                                              |   |           |
| Jay      Rifkin        |   | Chief      Executive Officer and Director(Principal      Executive Officer,Principal      Financial Officer andPrincipal      Accounting Officer) |   | April 13, 2010 |
|                   |   |                                                                                                                                              |   |           |
| /s/ William B. Horne   |   |                                                                                                                                              |   |           |
| William      B. Horne  |   | Director                                                                                                                                          |   | April 13, 2010 |
|                   |   |                                                                                                                                              |   |           |
| /s/ Alice M. Campbell  |   |                                                                                                                                              |   |           |
| Alice      M. Campbell |   | Director                                                                                                                                          |   | April 13, 2010 |
|                   |   |                                                                                                                                              |   |           |
| /s/ Alan Morelli       |   |                                                                                                                                              |   |           |
| Alan      Morelli      |   | Director                                                                                                                                          |   | April 13, 2010 |
|                   |   |                                                                                                                                              |   |           |
| /s/ David M. Kaye      |   |                                                                                                                                              |   |           |
| David      M. Kaye     |   | Director                                                                                                                                          |   | April 13,2010  |

----

|                                                         |         | Page   |
|--------------------------------------------------------------|--------------|--------|
| Report      of Independent Registered Public Accounting Firm |         | 40     |
|                                                         |         |   |
| Consolidated      Balance Sheets                             |         | 41     |
| Consolidated      Statements of Operations                   |         | 42     |
| Consolidated      Statements of Cash Flows                   |         | 43     |
| Consolidated      Statements of Stockholders’ Equity   |         | 44     |
|                                                         |         |   |
| Notes      to the Consolidated Financial Statements          |    | 45-63  |

----

----

| CHINA      YOUTH MEDIA, INC.                                                                 |
|----------------------------------------------------------------------------------------------|
|                                                                                         |   |   |   |   |   |   |
| Consolidated      Balance Sheet (Audited)                                                    |   |
|                                                                                         |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |
|                                                                                         |   | December      31, |   |   | December      31, |   |
|                                                                                         |   | 2009 |   |   | 2008 |   |
| ASSETS                                                                                       |   |   |   |   |   |   |
| CURRENT      ASSETS                                                                          |   |   |   |   |   |   |
| Cash      and cash equivalents                                                               |   | $ | 181,723 |   |   | $ | 34,425 |   |
| Accounts      receivable, net                                                                |   |   | — |   |   |   | 161,604 |   |
| Other      current assets                                                                    |   |   | 157,432 |   |   |   | 112,500 |   |
| TOTAL      CURRENT ASSETS                                                                    |   |   | 339,155 |   |   |   | 308,529 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Property      and equipment, net                                                             |   |   | 65,457 |   |   |   | 16,778 |   |
| Intangible      assets, net                                                                  |   |   | 4,664,879 |   |   |   | 8,537,503 |   |
| Other      Assets                                                                            |   |   | 24,916 |   |   |   | 98,968 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                            |   | $ | 5,094,407 |   |   | $ | 8,961,778 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY (DEFICIT)                                          |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| CURRENT      LIABILITIES                                                                     |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Accounts      payable                                                                        |   | $ | 106,382 |   |   | $ | 197,582 |   |
| Accrued      liabilities                                                                     |   |   | 1,068,293 |   |   |   | 848,006 |   |
| Note      payable - related party                                                            |   |   | — |   |   |   | 5,000 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| TOTAL      CURRENT LIABILITIES                                                               |   |   | 1,174,675 |   |   |   | 1,050,588 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| LONG      TERM LIABILITIES                                                                   |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Convertible      notes payable - related party                                               |   |   | 150,000 |   |   |   | 2,228,047 |   |
| Convertible      note payable                                                                |   |   | 250,000 |   |   |   | 250,000 |   |
| Note      payable                                                                            |   |   | 2,377,312 |   |   |   | 100,000 |   |
| Beneficial      conversion feature                                                           |   |   | (277,128 | ) |   |   | (207,489 | ) |
|                                                                                         |   |   |   |   |   |   |   |   |
| TOTAL      LONG TERM LIABILITIES                                                             |   |   | 2,500,184 |   |   |   | 2,370,558 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES                                                                       |   | $ | 3,674,859 |   |   | $ | 3,421,146 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| STOCKHOLDERS'      EQUITY (DEFICIT)                                                          |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Preferred      stock, $0.001 par value: 2,000,000 shares authorized;                         |   |   |   |   |   |   |   |   |
| Series      A Preferred Stock, $0.001 par value; 500,000 shares      authorized;             |   |   |   |   |   |   |   |   |
| 3,000      shares issued and outstanding at December 31, 2009;                               |   |   |   |   |   |   |   |   |
| 83,020      shares issued and outstanding at December 31, 2008;                              |   |   | 3 |   |   |   | 83 |   |
| Common      stock, $0.001 par value: 500,000,000 shares authorized;                          |   |   |   |   |   |   |   |   |
|     158,631,461      shares issued and outstanding at December 31, 2009; |   |   |   |   |   |   |   |   |
|     71,828,439      shares issued and outstanding at December 31, 2008;  |   |   | 158,631 |   |   |   | 71,828 |   |
| Paid-in      capital                                                                         |   |   | 21,420,227 |   |   |   | 16,313,219 |   |
| Accumulated      other comprehensive income                                                  |   |   | (213 | ) |   |   | — |   |
| Accumulated      deficit                                                                     |   |   | (20,159,100 | ) |   |   | (10,844,498 | ) |
|                                                                                         |   |   |   |   |   |   |   |   |
| TOTAL      STOCKHOLDERS' EQUITY (DEFICIT)                                                    |   |   | 1,419,548 |   |   |   | 5,540,632 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                    |   | $ | 5,094,407 |   |   | $ | 8,961,778 |   |

----

| CHINA YOUTH MEDIA, INC.                                                      |
|------------------------------------------------------------------------------|
|                                                                         |   |   |   |   |   |   |
| Consolidated      Statements of Operations and Comprehensive Income(Audited) |   |
|                                                                         |   |   |   |
|                                                                         |   |   |   |
|                                                                         |   | Years      Ended |   |
|                                                                         |   | December      31, |   |   | December      31, |   |
|                                                                         |   | 2009 |   |   | 2008 |   |
| REVENUE                                                                      |   |   |   |   |   |   |
| Sales                                                                        |   | $ | 7,000 |   |   | $ | 106,898 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Total      revenue                                                           |   |   | 7,000 |   |   |   | 106,898 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| OPERATING      EXPENSES                                                      |   |   |   |   |   |   |   |   |
|     Cost      of sales                                   |   |   | — |   |   |   | 54,678 |   |
| Selling,      general and administrative expenses                            |   |   | 5,389,363 |   |   |   | 2,533,725 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Total      operating expenses                                                |   |   | 5,389,363 |   |   |   | 2,588,403 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Operating      loss                                                          |   |   | (5,382,363 | ) |   |   | (2,481,505 | ) |
|                                                                         |   |   |   |   |   |   |   |   |
| Other      Income (expense)                                                  |   |   |   |   |   |   |   |   |
| Interest      income (expense)                                               |   |   | (281,044 | ) |   |   | (274,332 | ) |
| Rental      Income                                                           |   |   | 198,049 |   |   |   | 148,103 |   |
| Loss      on Abandonment                                                     |   |   | — |   |   |   | (130,317 | ) |
| Loss      on Impairment Goodwill                                             |   |   | (27,800 | ) |   |   | (132,200 | ) |
| Loss      on Impairment IP Holdings                                          |   |   | (3,821,444 | ) |   |   | (106,861 | ) |
|                                                                         |   |   |   |   |   |   |   |   |
| Total      other income (expense)                                            |   |   | (3,932,239 | ) |   |   | (495,607 | ) |
|                                                                         |   |   |   |   |   |   |   |   |
| NET      LOSS                                                                |   | $ | (9,314,602 | ) |   | $ | (2,977,112 | ) |
|                                                                         |   |   |   |   |   |   |   |   |
| BASIC      AND DILUTED NET LOSS PER COMMON SHARE                             |   | $ | (0.07 | ) |   | $ | (0.08 | ) |
|                                                                         |   |   |   |   |   |   |   |   |
| WEIGHTED      AVERAGE COMMON SHARES OUTSTANDING                              |   |   | 127,263,088 |   |   |   | 38,573,023 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Other      Comprehensive Income                                              |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustment                                 |   |   | (213 | ) |   |   | — |   |
| Net      income                                                              |   |   | (9,314,602 | ) |   |   | (2,977,112 | ) |
| COMPREHENSIVE      INCOME                                                    |   | $ | (9,314,815 | ) |   | $ | (2,977,112 | ) |

----

| CHINA YOUTH MEDIA, INC.                                                                                    |
|------------------------------------------------------------------------------------------------------------|
|                                                                                                       |   |   |   |   |   |   |
| Consolidated      Statements of Cash Flows (Audited)                                                       |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |
|                                                                                                       |   | Years Ended |   |
|                                                                                                       |   | December      31, |   |   | December      31, |   |
|                                                                                                       |   | 2009 |   |   | 2008 |   |
| Cash      flows from operating activities:                                                                 |   |   |   |   |   |   |
| Net      loss                                                                                              |   | $ | (9,314,602 | ) |   | $ | (2,977,112 | ) |
| Adjustments      to reconcile net loss to net cash used in operating      activities:                      |   |   |   |   |   |   |   |   |
| Loss      on Abandonment                                                                                   |   |   | — |   |   |   | 130,317 |   |
| Loss      on Impairment of Goodwill                                                                        |   |   | 27,800 |   |   |   | 132,200 |   |
| Loss      on Impairment of IP Holdings                                                                     |   |   | 4,325,054 |   |   |   | 106,861 |   |
| Depreciation                                                                                               |   |   | 16,809 |   |   |   | 27,202 |   |
| Amortization      of licenses                                                                              |   |   | 128,243 |   |   |   | 820,182 |   |
| Amortization      of beneficial conversion feature                                                         |   |   | 92,861 |   |   |   | 135,078 |   |
| Stock-based      compensation to employees and directors                                                   |   |   | 2,236,141 |   |   |   | 162,654 |   |
| Changes      in operating assets and liabilities:                                                          |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                                                   |   |   | 161,604 |   |   |   | 143,237 |   |
| Inventories                                                                                                |   |   | — |   |   |   | 15,436 |   |
| Other      assets                                                                                          |   |   | 29,120 |   |   |   | 33,397 |   |
| Accounts      payable and accrued liabilities                                                              |   |   | 237,131 |   |   |   | 413,885 |   |
| Deferred      revenue                                                                                      |   |   | — |   |   |   | (69,672 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |
|           Net      cash used in operating activities     |   |   | (2,059,839 | ) |   |   | (926,335 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                                 |   |   |   |   |   |   |   |   |
| Purchases      of licenses and developed content                                                           |   |   | (262,500 | ) |   |   | — |   |
| Purchases      of property and equipment                                                                   |   |   | (65,488 | ) |   |   | (3,530 | ) |
| Purchases      of intangible assets                                                                        |   |   | 254,026 |   |   |   | (2,010 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |
|           Net      cash used in investing activities     |   |   | (73,962 | ) |   |   | (5,540 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                                 |   |   |   |   |   |   |   |   |
| Proceeds      from issuance of common stock                                                                |   |   | 4,000 |   |   |   | 347,500 |   |
| Proceeds      from issuance of preferred stock                                                             |   |   | — |   |   |   | 31,200 |   |
| Proceeds      from issuance of convertible notes                                                           |   |   | — |   |   |   | 250,000 |   |
| Proceeds      from issuance of convertible note related party                                              |   |   | — |   |   |   | 232,000 |   |
| Proceeds      from note                                                                                    |   |   | 2,277,312 |   |   |   | 100,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
|           Net      cash provided by financing activities |   |   | 2,281,312 |   |   |   | 960,700 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Effect      of exchange rate                                                                               |   |   | (213 | ) |   |   | — |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents                                                  |   |   | 147,298 |   |   |   | 28,825 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period                                                      |   |   | 34,425 |   |   |   | 5,600 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at end of period                                                            |   | $ | 181,723 |   |   | $ | 34,425 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Supplemental      disclosures of cash flow information:                                                    |   |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Cash      paid for income taxes                                                                            |   | $ | — |   |   | $ | — |   |
| Interest      paid                                                                                         |   | $ | — |   |   | $ | — |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Non-cash      investing and financing activity:                                                            |   |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Beneficial      conversion feature                                                                         |   |   | 162,500 |   |   |   | 226,352 |   |
| Shares      issued pursuant to consulting agreement                                                        |   | $ | 100,000 |   |   | $ | — |   |
| Acquisition      of intangible assets for stock                                                            |   | $ | 600,000 |   |   | $ | 9,199,800 |   |

----

| CHINA      YOUTH MEDIA, INC.                                   |
|----------------------------------------------------------------|
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated      Statements of Stockholders' Equity (Deficit) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Additional |   |   |   |   |   |   |   | Other |   | Total |   |
|                                                           |   | Preferred      Stock |   | Common      Stock |   |   | Paid-In |   |   | Accumulated |   |   |   | Comprehensive |   | Shareholders’ |   |
|                                                           |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Capital |   |   | Deficit |   |   |   | Income |   | Equity      (Deficit) |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2007                               |   |   |          — |   |   |   |      — |   |   |   |         39,545,104 |   |   |  $ |         39,545 |   |   |  $ | 6,243,079 |   |   |  $ | (7,867,386 | )  |   |   | — |   |   |  $ | (1,584,762 | )  |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of preferred stock                               |   |   |    83,020 |   |   |   | 83 |   |   |   |   |   |   |   |   |   |   |   | 9,211,717.00 |   |   |   |   |   |   |   |   |   |   |   | 9,211,800 |   |
| Issuance      of common stock                                  |   |   |   |   |   |   |   |   |   |   | 32,283,335 |   |   |   | 32,283 |   |   |   | 469,417.00 |   |   |   |   |   |   |   |   |   |   |   | 501,700 |   |
| Debt      Discount, net effect                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 226,352.00 |   |   |   |   |   |   |   |   |   |   |   | 226,352 |   |
| Compensation      expense, stock option issuances              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 162,654.00 |   |   |   |   |   |   |   |   |   |   |   | 162,654 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | -2,977,112 |   |   |   |   |   |   |   | (2,977,112 | )  |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2008                               |   |   | 83,020 |   |   |   | 83 |   |   |   | 71,828,439 |   |   |  $ | 71,828 |   |   |  $ | 16,313,219.00 |   |   |  $ | (10,844,498 | )  |   |  $ | — |   |   |  $ | 5,540,632 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion      of preferred stock                             |   |   | (12,000 | ) |   |   | (12 | ) |   |   | 12,000,000 |   |   |   | 12,000 |   |   |   | (11,920 | ) |   |   |   |   |   |   |   |   |   |   | — |   |
| Cancellation of preferred stock                                |   |   | (68,020 | ) |   |   | (68 | ) |   |   | — |   |   |   | — |   |   |   | 68 |  |   |   |   |   |   |   |   |   |   |   | — |   |
| Issuance      of common stock                                  |   |   |   |   |   |   |   |   |   |   | 74,803,022 |   |   |   | 74,803 |   |   |   | 2,720,287 |   |   |   |   |   |   |   |   |   |   |   | 2,795,090 |   |
| Debt      Discount, net effect                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 162,500 |   |   |   |   |   |   |   |   |   |   |   | 162,500 |   |
| Compensation      expense, stock option issuances              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,236,141 |   |   |   |   |   |   |   |   |   |   |   | 2,236,141 |   |
| Foreign      currency translation adjustment                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (213 | )  |   |   | (213 | )  |
| Net      loss                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (9,314,602 | ) |   |   |   |   |   |   | (9,314,602 | )  |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2009                               |   |   | 3,000 |   |   |   | 3 |   |   |   | 158,631,461 |   |   |  $ | 158,631 |   |   |  $ | 21,420,227 |   |   |  $ | (20,159,100 | )  |   |  $ | (213 | )  |   |  $ | 1,419,548 |   |

----

----

----

| Level      1  | inputs      to the valuation methodology are quoted prices (unadjusted) for identical      assets or liabilities in activemarkets. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| Level      2 | inputs      to the valuation methodology include quoted prices for similar assets and      liabilities in active markets, and inputs that are observable for the      assets or liability, either directly or indirectly, for substantially the      full term of the financialinstruments. |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level      3 | inputs      to the valuation methodology are unobservable and significant to the fair      value. |
|--------------|---------------------------------------------------------------------------------------------------|

----

----

**Recent AccountingPronouncements**

----

----

----

| Property and Equipment     |   | December 31, |    |
|--------------------------------------|--------|-------------------|---------|
|                                 |   | 2009              |    |   | 2008 |   |
| Computer      Software and Equipment |   | $                 | 99,093  |   |   | $ | 33,846 |   |
| Office      Furniture and Equipment  |   |              | 6,869   |   |   |   | 6,628 |   |
| Total      Property and Equipment    |   | $                 | 105,962 |   |   | $ | 40,474 |   |
|                                 |   |              |    |   |   |   |   |   |
| Less:      Accumulated Depreciation  |   |              | (40,505 | ) |   |   | (23,696 | ) |
| Property      and Equipment, net     |   | $                 | 65,457  |   |   | $ | 16,778 |   |

----

----

| Intangible      Assets                |   | December 31, |       |
|---------------------------------------|--------|-------------------|------------|
|                                  |   | 2009              |       |   | 2008 |   |
| China      IPTV & Mobile Licenses |   | $                 | 2,352,500  |   |   | $ | 6,391,800 |   |
| YesTV      China IPTV Rights          |   |              | 3,408,000  |   |   |   | 2,808,000 |   |
| Domain      Assets                    |   |              | 7,833      |   |   |   | 2,010 |   |
| PerreoRadio      Assets               |   |              | -          |   |   |   | 27,800 |   |
| Licensed      and Developed Content   |   |              | -          |   |   |   | 283,104 |   |
| Total      Intangible Assets          |   |              | 5,768,333  |   |   |   | 9,512,714 |   |
|                                  |   |              |       |   |   |   |   |   |
| Less:      Accumulated Amortization   |   |              | (1,103,454 | ) |   |   | (975,211 | ) |
| Intangible      Assets, net           |   | $                 | 4,664,879  |   |   | $ | 8,537,503 |   |

| Fiscal      Year Ended                                                 |   | Amortization |        |
|------------------------------------------------------------------------|--------|--------------|-------------|
| December      31, 2010         |   | $            | (445,300.00 | ) |
| December      31, 2011         |   | $            | (445,300.00 | ) |
| December      31, 2012         |   | $            | (445,300.00 | ) |
| December      31, 2013         |   | $            | (445,300.00 | ) |

|                      |   | Years Ended December 31, |       |
|---------------------------|--------|-----------------------------------------|------------|
|                      |   | 2009                                    |       |   | 2008 |   |
| U.S.      Operations      |   | $                                       | (3,641,762 | ) |   | $ | (2,197,661 | ) |
| Hong      Kong Operations |   |                                    | (4,936,221 | ) |   |   | (779,451 | ) |
| PRC      Operations       |   |                                    | (736,619   | ) |   |   | - |   |
|                      |   | $                                       | (9,314,602 | ) |   | $ | (2,977,112 | ) |

| Deferred      Tax Assets                     |   | December 31, |       |
|----------------------------------------------|--------|-------------------|------------|
|                                         |   | 2009              |       |   | 2008 |   |
| Federal      Net Operating Loss Carryforward |   | $                 | 2,637,788  |   |   | $ | 2,589,137 |   |
| State      Net Operating Loss Carryforward   |   |              | 685,825    |   |   |   | 671,575 |   |
| Foreign      Net Operating Loss Carryforward |   |              | 186,667    |   |   |   | - |   |
| Stock      Based Compensation                |   |              | 957,560    |   |   |   | 2,650,593 |   |
| Amortization                                 |   |              | 904,127    |   |   |   | 117,810 |   |
| Other      accruals                          |   |              | -          |   |   |   | - |   |
| Deferred      Revenue                        |   |              | -          |   |   |   | - |   |
| Beneficial      Conversion Feature           |   |              | (118,722   | ) |   |   | (88,888 | ) |
|                                         |   |              |       |   |   |   |   |   |
| Total      Gross Deferred Tax Asset          |   |              | 5,253,246  |   |   |   | 5,940,227 |   |
| Less      Valuation Allowance                |   |              | (5,253,246 | ) |   |   | (5,940,227 | ) |
|                                         |   |              |       |   |   |   |   |   |
| Net      Deferred Tax Asset                  |   | $                 | -          |   |   | $ | - |   |

----

----

| Effective      Tax Rate                                       |   | December 31, |    |
|---------------------------------------------------------------|--------|-------------------|---------|
|                                                          |   | 2009              |    |   | 2008 |   |
| Federal      statutory tax rate                               |   |              | (34)%   |  |   |   | (34)% |  |
| State      and local income taxes, net of federal tax benefit |   |              | 0.00%   |  |   |   | 0.00% |  |
| Rate difference from foreign operations                       |   |              | 17.50%  |  |   |   | 0.00% |  |
| Cancellation of options                                       |   |              | 23.90%  |  |   |   | 0.00% |  |
| Non      deductible items                                     |   |              | 0.00%   |  |   |   | 0.08% |  |
| Valuation      allowance                                      |   |              | (7.40)% |  |   |   | 33.94% |  |
|                                                          |   |              |    |   |   |   |   |   |
| Total      effective tax rate                                 |   |              | (0.00)% |  |   |   | 0.02% |  |

| Accrued      Liabilities                |   | December 31, |      |
|-----------------------------------------|--------|-------------------|-----------|
|                                    |   | 2009              |      |   | 2008 |   |
| Obligations      on license agreements  |   | $                 | 110,095   |   |   | $ | 47,595 |   |
| Accrued      salaries                   |   |              | 330,000   |   |   |   | 330,000 |   |
| Accrued      professional fees          |   |              | -         |   |   |   | 90,000 |   |
| Interest                                |   |              | 264,513   |   |   |   | 77,016 |   |
| Deferred      Rent Expense              |   |              | 21,988    |   |   |   | - |   |
| Lease      Security Deposits            |   |              | 32,000    |   |   |   | 32,000 |   |
| Accrued      Liabilities due to vendors |   |              | 219,740   |   |   |   | 128,669 |   |
| Other                                   |   |              | 89,956    |   |   |   | 39,414 |   |
|                                    |   | $                 | 1,068,293 |   |   | $ | 744,693 |   |

----

----

----

| Operating      Lease Payments |   | Minimum Payments |    |
|-------------------------------|--------|-----------------------|---------|
| 2010                          |   | $                     | 239,566 |   |
| 2011                          |   |                  | 82,757  |   |
| 2013                          |   |                  | 63,508  |   |
| Total                         |   | $                     | 634,986 |   |

|                         |   |                          |        |   | Outstanding Options |   |
|------------------------------|--------|-------------------------------|-------------|--------|--------------------------|--------|
|                    |   | SharesAvailable forGrant |        |   | Number ofShares     |   |   | WeightedAverageExercisePrice |   |   | WeightedAverageRemainingContractual Life(years) |   |   | AggregateIntrinsicValue |   |
|                         |   |                          |        |   |                     |   |   |   |   |   |   |   |   |   |   |
| December      31, 2007       |   |                          | 7,856,667   |   |                     |   | 7,143,333 |   |   |   | 0.73 |   |   |   | 7.95 |   |   |   | - |   |
| Grants                       |   |                          | -           |   |                     |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellations                |   |                          | 160,000     |   |                     |   | (160,000 | ) |   |   | 0.14 |   |   |   | 8.91 |   |   |   | - |   |
| December      31, 2008       |   |                          | 8,016,667   |   |                     |   | 6,983,333 |   |   |   | 0.74 |   |   |   | 6.91 |   |   |   | - |   |
| Stock      Plan Amendment    |   |                          | 35,000,000  |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Grants                       |   |                          | (39,950,000 | )      |                     |   | 39,950,000 |   |   |   | 0.13 |   |   |   | 9.36 |   |   |   | - |   |
| Cancellations                |   |                          | 5,975,000   |   |                     |   | (5,975,000 | ) |   |   | 0.84 |   |   |   | 6.55 |   |   |   | - |   |
| December      31, 2009       |   |                          | 9,041,667   |   |                     |   | 40,958,333 |   |   |   | 0.13 |   |   |   | 8.96 |   |   |   | - |   |
|                         |   |                          |        |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options      exercisable at: |   |                          |        |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2007       |   |                          |        |   |                     |   | 3,941,667 |   |   |   | 0.78 |   |   |   | 8.10 |   |   |   | - |   |
| December      31, 2008       |   |                          |        |   |                     |   | 6,383,333 |   |   |   | 0.80 |   |   |   | 6.80 |   |   |   | - |   |
| December      31, 2009       |   |                          |        |   |                     |   | 6,200,000 |   |   |   | 0.14 |   |   |   | 9.37 |   |   |   | - |   |

----

| Nonvested      Shares               |   | Shares |       |   | Weighted AverageGrant Date FairValue |   |
|-------------------------------------|--------|--------|------------|--------|-----------------------------------------------------|--------|
| Nonvested      at December 31, 2007 |   |   | 2,522,500  |   |                                                | $      | 0.64 |   |
| Granted                             |   |   | -          |   |                                                |   | - |   |
| Vested                              |   |   | (1,968,750 | )      |                                                |   | 0.77 |   |
| Forfeited                           |   |   | (160,000   | )      |                                                |   | 0.13 |   |
| Nonvested at December 31, 2008      |   |   | 393,750    |   |                                                | $      | 0.15 |   |
| Granted                             |   |   | 39,950,000 |   |                                                |   | 0.11 |   |
| Vested                              |   |   | 6,200,000  |   |                                                |   | 0.12 |   |
| Forfeited                           |   |   | 5,850,000  |   |                                                |   | 0.78 |   |
| Nonvested      at December 31, 2009 |   |   | 34,700,000 |   |                                                | $      | 0.12 |   |

| Black-Scholes      Pricing Model Assumptions                             |   | Year ended December 31, |   |
|--------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                     |   | 2009                                   |   |   | 2008 |   |
| Weighted      average risk free interest rate                            |   | 3.77%                                  |   |   | 3.92% |   |
| Weighted      average life (in years)                                    |   | 5.00                                   |   |   | 4.44 |   |
| Volatility                                                               |   | 138      – 142%                  |   |   | 138      – 155% |   |
| Expected      dividend yield                                             |   | -                                      |   |   | - |   |
| Weighted      average grant-date fair value per share of options granted |   | 0.13                                   |   |   | 0.65 |   |

----

----

----

| Outstanding         |   |              | Exercisable |   |
|---------------------|--------|-------------------|-------------|--------|
| Exercise Price |   | NumberOutstanding |        |   | WeightedAverageRemainingContractualLife (years) |   |   | WeightedAverageExercise Price |   |   | NumberExercisable |   |   | WeightedAverageExercise Price |   |
| $0.15               |   |              | 250,000     |   |   |   | 0.08 |   |   | $ | 0.01 |   |   |   | 250,000 |   |   | $ | 0.01 |   |
| $0.65               |   |              | 300,000     |   |   |   | 0.07 |   |   | $ | 0.06 |   |   |   | 300,000 |   |   | $ | 0.06 |   |
| $0.09               |   |              | 875,000     |   |   |   | 1.00 |   |   | $ | 0.02 |   |   |   | 875,000 |   |   | $ | 0.02 |   |
| $0.09               |   |              | 525,000     |   |   |   | 0.62 |   |   | $ | 0.01 |   |   |   | 525,000 |   |   | $ | 0.01 |   |
| $0.03               |   |              | 1,250,000   |   |   |   | 2.49 |   |   | $ | 0.01 |   |   |   | 1,250,000 |   |   | $ | 0.01 |   |
| $0.03      - $0.65  |   |              | 3,200,000   |   |   |   | 4.25 |   |   | $ | 0.12 |   |   |   | 3,200,000 |   |   | $ | 0.12 |   |

----